Employment Law: Firing an 'employee at will'

By STEPHEN P. HORNEREmployment Law

Published
7:45 am EDT, Thursday, October 16, 2014

Inquiry: None of our employees have employment contracts. I have heard over the years that means they are employees at will. Does that mean that management has the right to fire them at any time? Regardless of the reason?

Response: Well, in order to answer this question, we first must determine the employment status of the employees. There are three different possible types of employment status, as follows:

1. Employees with an employment contract

These are employees that have an express written employment contract with their employer. Usually, higher level employees have such employment contracts if anyone in the organization has them.

2. Employees with an "implied" employment contract

Unlike the above category, these employees do not have an express written employment contract between themselves and their employers. However, there have been either oral and/or written statements of job security assurance provided to these employees by their employer (which have created an "implied" employment contract). Usually such assurances of job security are made during the initial interviewing process or were made via the personnel manual.

3. Employees at will

These are employees who have neither an express written contract or the basis for claiming an "implied" employment contract. Most employees in the work place fit into this latter category.

Another issue is whether the company has "independent contractors" ... please note that very often such workers are really employees!

Assuming that your company has no employees with employment contracts (as your letter states) and that none of your employees have the basis for claiming implied employment contract, then your employer's only concern is obviously how to deal with the "employment at will" status of his employees.

With regard to your inquiry, it is true that an employer does not have to have a reason (legally) for terminating employees at will, nor is there any requirement of paying severance pay (unless required by a personnel policy of the employer) nor is there any requirement that advance notice of such discharge be provided to the employee. The only legal requirement on the employer in such circumstances is to not violate any state or federal laws and not to commit any torts (like the intentional infliction of emotional stress or defamation) with regard to terminating such employees.

As a practical matter, although not legally required when terminating an "at will" employee, employers should have a good reason for terminating one's employment.

Why is that? Because the employer's action may be challenged by his/her employee as being a wrongful discharge or as being discriminatory. Accordingly, the company would look silly in many instances for discharging an employee without any reason at all and the investigating agency or a jury judging the employee's claims could well perceive that the real reason was a discriminatory one. Perhaps a quick sampling of potential claims which an employer might face as a result of discharging an employee might give pause to the employer who feels that he/she has the right to discharge "an at will employee" without a good reason:

In conclusion, although it is clear that the employer has the upper hand with regards to discharging employees at will (since there is no contractual restriction on his/her right to discharge), the employer is still obligated to walk very carefully when discharging employees because there are numerous "employment related mine fields" out there through which he or she must tread lightly.

Stephen P. Horner is an attorney who practices employment and labor law. Questions for this column may be submitted at shorner@horner-law.com